Why hello, lovely design*sponge-ers! It’s been a longish while since I last posted here, but it’s a delight to be back. I’ve been asked to pick up where my last few posts left off – I’ve posted a series of articles on HR for the self-employed, where I shared a few tips on hiring, delegating and providing yourself with decent employment benefits. As my own business continues to grow, though, I’ve been learning more and more about the dos and don’ts of hiring help, so I thought I’d come back & share a few more thoughts.

Timing is Every. Thing.

(Why it’s crucial to expand at the right time.)

When it came time for Emira & I to hire our first employee, we had so much work we couldn’t handle it all. As naturally cautious business owners, though, we knew the upswing in demand might not last, so we waited a while to see if the phone would keep ringing. The trouble was, we waited way too long. In our zeal to mitigate risk, we overworked ourselves for two full years – and as anyone who’s read The E-Myth will tell you, two years of working in your business costs you the precious opportunity to work on your business. Not hiring help sooner is one business decision we both regret, and if we could do it all over again, we’d bring on staff at an earlier stage.

What we didn’t realize at the time was that hiring wasn’t just the solution to our too-long work hours – it also benefited our company’s bottom line. Cashflow picked up as soon as we increased our work capacity, because we could turn projects around more quickly. And customer satisfaction increased, because our timelines became shorter and more predictable. So that first employee paid for himself several times over.

I hope you’ll learn from my mistakes, and watch for the warning signs that it’s the right time to hire:

You’re working too much. If you can’t remember the last time you spent your weekend relaxing and having fun – or that you worked an eight-hour day – it’s probably about time you got serious about making a hire.

You’re spending your precious time on the wrong stuff. None of us, no matter how multi-talented, can be equally great at everything. And as a business owner, your priority has to be steering the ship, not swabbing the decks. If you’re getting bogged down in work that could be delegated, but isn’t, ask yourself what you might accomplish if you handed it off to someone else.

You’re turning down sales because you’re too busy to take on more work. There’s nothing wrong with saying no to the wrong customers, but if you find yourself saying no regretfully, because demand is simply outpacing your ability to keep up your supply, that’s a clear sign you could use some production help.

You’re stuck in a perfectionism loop. If your biggest resistance point to hiring help is that you fear no one else will do as good a job as you can, go read my “Control Enthusiast’s Guide to Delegating.” Then come back here & make a hiring plan.

You’re already convinced you need to hire someone – you just think you can’t afford it. Maybe you already know, deep down in your bones, it’s the right time, but your bank balance isn’t showing as healthy a surplus as you’d like. Taking responsibility for another person’s livelihood is nothing to take lightly – but there are ways to mitigate your financial risk. See below for more.

Who to Hire

Once you’ve decided to hire someone, the next big question is: Who? Do you need an intern, a freelancer, a full- (or part-) time employee, or a virtual assistant? What’s their job description going to be? There are as many answers to these two big questions as there are entrepreneurs, but here’s how I break the options down, in brief:

Interns, co-op students, and the like tend to be low-cost hires and quite keen. They’re looking to “grow up to be you,” someday, so they’re appreciative of the on-the-job experience they’ll gain and you can feel free to throw them all the “grunt work” you want without too much guilt. On the other hand, it’s hard to keep a good one for a very long time – a few months, maybe a year, and they’ll be looking to move on up. So if you find a gem, consider offering them a sweeter deal in the long run so you can hold onto their expertise.

Freelancers are specialists who can help by taking on a specific task in your business, whether it’s stitching up your custom-designed handbags or designing web banners for your affiliate sales. They’ll tend to charge by the job, which makes them a good bet for anything where you need to be able to predict your costs consistently. Two caveats, though: 1) Unless you’re their only client, be prepared to get slotted in wherever they can schedule your work (if they’re busy, you’ll need to wait in line); and 2) we’ve occasionally experienced an “out of sight, out of mind” level of service with freelancers, where things seemed to be going well until they stopped returning phone calls or emails. So be sure to check their references, just like you would with an employee.

Virtual assistants can help manage your inbox and appointment calendar, respond to customer service requests, and all manner of other things you might only get otherwise if you had an admin person on your staff – but like other freelancers, they juggle multiple clients, thereby affording you the benefits of an assistant at a fraction of the cost. Most of the coaches I know have virtual assistants who handle everything from scheduling their clients, to getting them set up with web conferencing software (for teleclasses and such), managing e-book deliveries, arranging their travel schedules, keeping their websites up to date, and so on. VAs are great for any business that requires a certain amount of admin work; however, you want to make sure they are freeing you up for billable work, since they are unlikely to be producing anything you can actually sell.

Employees provide you with the most control. With great power, though – as Spider-Man taught us – comes great responsibility. Those on your payroll will report directly to you, and you’ll have free rein to dictate the terms of their schedules, responsibilities, and success criteria (within legal limits). This option tends to provide the greatest stability (assuming you treat your staff fairly) and predictability, but of course if your revenues aren’t predictable or stable, taking on someone full- or part-time may feel stressful. I do encourage you to consider part-time staff if you’re nervous about paying for (or finding work for) a full-time position – there are plenty of great people out there looking for part-time work and we’ve had great experiences hiring people on a variety of different part-time terms (4 days a week vs 5 half-days a week, to give two examples).

These options aren’t mutually exclusive, either. Our first hires were freelancers, but they didn’t offer us the stability & predictability we craved. When we hired our first employee, it was on a 3-month, 20 hour a week contract, and when that 3 months was up, we hired him on as a permanent, 4 days a week employee. (He’s now with us full-time.) There’s no rule saying you can’t try people out first, then move to a more long-term arrangement as you adjust to your increased capacity and new management role.

When it comes to figuring out what position to fill first, you may have a tough time nailing down exactly what tasks to delegate. (After all, you’re probably doing a decent impression of a one-woman band, cymbals, harmonica and all.) Here’s a quick-and-dirty guide to determining what stuff to hand off:

Write down every type of work you do in your business. EVERYTHING. That might include sales work, answering the phone, fulfilling orders, designing new products, meeting with distributors, etc. etc. etc. Put each item on a sticky note.

Once you’re sure you have everything down, start grouping like items together, thematically – try asking yourself, could a single person realistically do this and that? Line up matching items in columns and label them with a role. Eventually, you’ll get an idea of the various roles you play: e.g. salesperson, designer, business owner, customer service rep, etc.

Ask yourself the following questions:

Which of these roles is highest-priority for you to perform, and which could potentially be passed off to someone else?

Where do you see the greatest opportunity for increasing your capacity & revenues?

Could more than one role be combined into a single job description, at least short-term?

In my experience, the answers will likely come to you quickly as soon as you see all of the sticky notes spread out in front of you.

How to Pay Your New Helper

When it comes to paying for your extra pair of hands, you have two basic options: either they pay for themselves, or they free you up to earn more than you do currently.

In the first scenario, your helpers perform tasks that net you direct revenues: hourly services you can bill out at a premium (i.e. more than you pay them), sales work, order fulfillment, and so on. In the latter, they are coming in to do the things that get in the way of you doing your most profitable work.

Either way, new staff should pay for themselves pretty darned quick. This was a lesson we had to see to believe – we were pleasantly shocked when mere weeks after our first hire, cheques started arriving in the mail at a more frequent pace. You may have a slightly longer wait – it can take a few months to ramp up a new employee – but so long as you’ve done your homework to determine the most strategic hire, you should find yourself on solid financial ground.

What Next?

You’ve made the toughest decisions by now: Whether to hire, who to hire, and how to pay them. All that remains is putting together a job posting and vetting applicants. My next installment will cover the nitty-gritty of how to craft a great ad for your position, and where to go about finding the right people.

Meanwhile, if you’ve got questions about any of the above – or if you have your own experiences to share – leave them in the comments! I look forward to hearing your thoughts.

Awesome post. I LOVE the idea of using stick notes to organize tasks into groups to create an understanding of the job functions you need your new hire to perform.
It ain’t easy being a bizlady! Looking forward to more posts.

Hmmm. Useful advice, but I strongly disagree with your comments regarding “feel[ing] free to throw them all the “grunt work” you want without too much guilt” when it comes to interns. An internship is MEANT to be a position that you give someone where they work at a decreased rate or for free in return for training that they could not necessarily get elsewhere – basically training that could replace or supplement an education. The trend over the past 20 years or so of ‘hiring’ interns to be glorified PAs is, quite frankly, abysmal, and not technically legal.

Hi Altaira – I completely appreciate your perspective. To clarify, my intent was not to suggest that “grunt work” would include personal errands (e.g. picking up dry cleaning) or grabbing coffee – rather, there are plenty of things in my business life that I now think of as “grunt work” but would be excellent training opportunities for someone just starting out. In my line of work, that might include production design work (e.g. cropping & formatting photos), making small-scale updates to clients’ websites, adapting a site design for an email newsletter, and so on. After 15 years in the biz, that stuff feels tedious to me but is exactly what I started out doing when I was someone else’s trainee. I agree with you that an intern should not be an un(der)paid PA.

Hello
I read this from the point of view of an employee lloking to make the move to my own business. It has confirmed my suspicions that I haven’t been hired properly and need to change my working arrangement to best help the company I currently work in and the company I hope to start for myself!
Thank you Biz Ladies. Again.

THANK YOU, Altaira, for bringing up that article. The drudgery that some interns go through unpaid (myself included, in the past) is absolutely ludicrous. That NY Times article is a must-read for anyone in the US that is considering taking on an intern.

Thanks for this great posting Lauren! Our company Leaders are making their list of tasks and roles ready to discuss at our Finacial Revue next week. It really got us thinking about bringing another person onboard in addition to our core team and Freelancers. Thanks for being the catalyst for a very valuable exercise.

Such a great article, with some great tips. Sometimes, especially when people are starting out their own businesses, they may not even think about having to hire people on–much less all the different options for help. Especially the VA’s–this one seems to not necessarily be widely known. Thanks for tips and for another great Biz Ladies post!

Perfect timing. I am committed to find an intern this week! I just can’t even find time to do it. I need some specific skills ie photoshop and am thinking of unpaid internship to paid within a couple of months if all goes well. I am thinking maybe a student may still be able to work for me. I just need to know the best place to find one! I get overwhelmed when I look at college websites ack! craigslist seems a bit scary. I am trying the creative hotlist. If you have other suggestions, let me know!

Wow, what a great post Lauren. Thank you! I feel like you wrote this just for me! How’d you know that I need to hire a couple of different people and sooooooon no less? Love the sticky note idea; I’ll be implementing this for sure. Can’t wait until next week for the next part!!

I just want to make a quick distinction; I have no problem with paid internships and agree that they can be an extremely valuable tool for employers and interns alike.

However, there still seems to be a misconception of what constitutes a legal UNpaid internship. The laws around this in the US are actually very strict, it just seems that they are seldom followed.

The US Dept of Labour States that, “the employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded” (http://www.dol.gov/whd/regs/compliance/whdfs71.htm) – thus, if the intern is working on something that will later be going out to a client, they must be paid.

Lauren – I know that you didn’t specifically mention unpaid interns in your post, and judging by your comment, it seems that you agree that they deserve to be paid. But a few other comments have suggested that there is a view that unpaid interns are a great way to get some free work or to test out a potential employee without making a financial investment.

As much as young people today are eager to take on unpaid internships to get ahead, it is a growing problem in both the US (and Canada), where there are fewer and fewer actual paid positions available for those starting out.

Great post otherwise! I do want to add that I absolutely love DesignSponge, but this issue was just too big for me to not comment on it!

What perfect timing! We just hired a real Employee, and it has changed our lives! She does all the shop stuff like answering emails, or entering data into spreadsheets, while I can actually work and sew and develop new ideas! And the shop has never been cleaner. I tell her every day how great her work is, in hopes that she never leaves.
I ADORE the sticky note idea!
BizLadies rule :)

I can’t believe that there is such a thing as unpaid interns in the US and elsewhere.
In Australia it would be against labour laws to have anyone do work unpaid.
Great post though, very helpful suggestions.

This post is fantastic and I wish it had come out a couple weeks ago, before we made the mistake of hiring a paid student intern that was not right for us. It caused us more stress than positivity, and it slowed us down so much. She was also a friend and took advantage of the fact that we are flexible and laid back. The responsibilities weren’t laid out properly at the start (though we thought we did a good job, the circumstances tell otherwise). Maybe she felt too comfortable and crossed boundaries very quickly. We know we are partly to blame since we really didn’t know how to hire the right person. It didn’t work out. So add to the advice, make sure you think before hiring friends…and also be honest about what you and your company truly need in an intern or employee. You will end up wasting time and precious energy on negative things. Hope our experience can help others. I will absolutely be doing these exercises!

Also, the “grunt work” of any business still needs to be done by someone. I run a print shop and that “grunt work” of cleaning screens and the “getting your hands dirty” type of stuff is all done by my biz partner and myself. I agree with Lauren that production type stuff is excellent training experience for someone interested in any field. We’ll be doing it anyway (its all part of the job!) until we find the right person who doesn’t see it as a negative thing.

Great post. I think one thing you touched upon is really important for new businesses especially: the ability for employees to have more than one skill and the need for them to fill the shoes of multiple people. For my business I had a very hard time finding employees I could trust, and people that were good at exactly what I needed. I recently found a site called SideSkills.com. SideSkills allows us to use our existing connections to open new doors to clients and a talent pool for hiring. You can find temporary employees or full-time employees. I found a couple people already even got some new business. Hope this helps everyone…

Wow! Thanks for this helpful discussion. As a new graduate seeking employment in a small, creative business so I can learn how to run my own, I used this post backwards to find out what kind of questions I need to ask about my position, its future, the work I will be doing and the overall vision my new employer might have for there business.
It is such a privilege to learn from the Biz Ladies!

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